Tulsa City Hall: June 2008 Archives

Tulsa City Councilor Rick Westcott sent his District 2 constituents an explanation of the legal situation in which the councilors found themselves Thursday night, when they voted to appropriate money from the sinking fund to pay the settlement in the Tulsa Industrial Authority / Tulsa Airport Improvements Trust lawsuit (money that will ultimately go to the Bank of Oklahoma):

There's some misunderstanding about the Council's vote regarding the settlement of the Great Plains lawsuit. We probably should have made it more clear at the meeting.

The City Council did not vote to approve the settlement. We had no authority to either approve or reject the settlement. It had already been done and it was totally out of our hands. The Mayor had already approved the settlement and, on Thursday, it was submitted to the Judge and he approved it. On Thursday afternoon the settlement was filed as a judgment against the City of Tulsa. All of that was done by the Mayor, under her authority as chief administrative officer of the City. The settlement was approved and entered as a judgment before the Council even met on Thursday evening.

The only thing which we did on Thursday was state whether there is sufficient money in the Sinking Fund to pay the settlement. The Finance Department informed us that there is and, based upon that, we had to vote to say, "yes, there is sufficient money."

Legally, we had no choice but to vote 'yes'.

After the Finance Department informed us that there is sufficient money in the Sinking Fund to pay the judgment, if we had voted 'no', we would have been sued, just for voting 'no'.

We had no vote, no say whatsoever, regarding the settlement. The Mayor entered into the settlement agreement without Council approval and it was approved by the Judge before the Council met last night.

The article in the Tulsa World is a little bit confusing. But, the subject is a little confusing.

It says that the Council voted to "have property taxpayers pay the BOK." That's more or less accurate, but it doesn't tell the whole story.

The City's Sinking Fund is used to pay judgments against the City. Once the settlement was filed as a judgment, then, by law, the Sinking Fund had to be used to pay the judgment Money is paid into the Sinking Fund from the City's portion of property taxes. So, it's true that property taxpayers' money will be used to pay the settlement. But, that's because the settlement was filed as a judgment against the City, and the Sinking Fund has to be used to pay judgments, and property taxes are used to put money into the Sinking Fund.

The article also says that the Council voted on "whether to appropriate the money from the sinking fund." Again, that's more or less accurate, but it doesn't tell the whole story, either. By law, the Council had to vote on whether there is sufficient money in the Sinking Fund to pay the judgment. At the meeting on Thursday, the City Finance Department informed the Council that there is enough money in the Sinking Fund. Once the Finance Department told us that, we had no choice but to vote, "yes" and approve paying the judgment out of the Sinking Fund. We had no choice in whether to 'appropriate money from the sinking fund.'

We didn't vote on whether to use money from the Sinking Fund to pay the judgment. By law, that's where the money has to come from. All we did was say that there is enough money in the Sinking Fund to pay it.

If we had voted "no", then the Bank of Oklahoma, or the Tulsa Airports Improvement Trust, or one of the other parties to the lawsuit, would have filed a separate law suit against the City Council, seeking a Write of Mandamus. That's an Order from the Couettlert which commands a public body or a public officer to do something that they have a legal duty to do. In this case, they would have won and the City would also have had to pay their attorney fees which they incurred in pursuing a Writ of Mandamus.

Last night, I explained my misgivings about the settlement. I am against the settlement at this point in time.

As I said, naming the City of Tulsa as a defendant in the lawsuit was just an expedience to put the City in a position where we could legally settle the lawsuit. Previously, when the City wasn't a defendant, there were attempts to persuade City officials to pay for the settlement. That would have been illegal, because we weren't a defendant. Naming the City as a defendant was just a method to put the City in a position to pay for the settlement.

But setting that aside and just looking at it as a straight-up lawsuit, settlement at this time is far, far premature.

I don't think the lawsuit and the claim of "unjust enrichment" against the City had any merit. I would never advise a client to settle immediately after being named in a lawsuit. I'd have gone through the discovery phase and, hopefully, reduced the settlement amount by showing that my client had the stronger case.

But, we weren't given that opportunity.

I hope this explanation helps. If you still have questions, please give me a call or send me an e-mail.

RDW

I appreciate Councilor Westcott's perspective and am glad to know he opposes the settlement. The question now is whether he and the other councilors will do anything to halt the settlement or, failing that, to impose some penalty on Mayor Kathy Taylor for her rash action against the best interests of Tulsa's taxpayers.

The council should also seek full public disclosure of the decision-making process -- why the rush, who stood to suffer if the June 30 deadline wasn't met, who met with whom? And the financial and contractual arrangements between the parties should be fully disclosed as well. Why was a BOk attorney acting as the attorney for the Tulsa Industrial Authority in this lawsuit? Has TIA already repaid BOk, or will they now repay the bank? Was there legal action by BOk against TIA?

In the long run, we probably need a charter change to require council approval on legal settlements or contracts above a certain dollar value. No one should be committing that much city money unilaterally.

Comments from elsewhere on the web about the City of Tulsa's payment of a $7.1 million Great Plains Airlines debt it did not owe:

KFAQ's Chris Medlock was a City Councilor the last time someone tried to get the City to pay for the Great Plains mess. Here's what he had to say when the news of the bogus lawsuit and settlement emerged on Wednesday:

Word is that Friday morning she will meet with the Tulsa City Council in a special meeting to inform them of the deal. She will be using her full authority to bind the city to a contract, so she can act without the approval of the City Council.

On Thursday Medlock spelled out whythe Council's hands were tied

This surveying of the Sinking Fund is considered to be a "ministerial" action which a previous City Attorney, Alan Jackere told the Council when I was a member, that the council is duty bound to certify the figures, if they are true....

The last time the council voted down a "ministerial" action was when it voted not to approve the plat for the F&M Bank that was eventually built at 71st and Harvard. When the Council took that action, F&M filed suit against the councilors individually, threatening their personal assets. Since it took a majority of councilors to deny the plat, a majority of the council were named in the suit. As such, no majority of the council could be mustered to vote to give the councilors [me included] the legal services of City Legal. As such, each councilor was forced to hire their own counsel.

On his Thursday show, Medlock played audio from that morning's TAIT board meeting in which board member Dewey Bartlett credited Mayor Kathy Taylor with working out a settlement with the Bank of Oklahoma. In other words, she wasn't responding to someone suing the City; she was the driving force behind adding the City to the lawsuit.

Steve Roemerman attended Thursday's Council meeting and has photos. He reports that Taylor was unwilling, as she has been throughout her term of office, to face the public or the Council and answer for her decisions:

That leads us to last night's Council meeting. Mayor Taylor showed up for her Mayor's Report, and gave a quick explanation of why Tulsa had to pay this money. She said "This lawsuit has been following Tulsa for years." This is not entirely true because Tulsa was not part of this suit until recently...June 25 recently! Unless 1 day = over a year somehow, "years" is not how I'd put it...The truth is that Tulsa, and the Mayor's office in particular, have been following this suit for years, eager to give BOK money that we don't owe.

When she was finished, Taylor abruptly left, basically telling the Council that a lawyer would answer any further questions they had when it came time to vote on the release of the funds. She did not stick around and listen to the gallery of concerned citizens who went to the trouble of coming down to the council, she left!

Taylor, BOK, TAIT, and their lawyers say this is a good deal for Tulsa. I'm not entirely sure I buy that. If it were, this deal would have been made in the light of day, and there would have been no rush to push it through, in just 3...THREE short little days. I call Shenanigans!

Given the rush to get this done right before the end of a quarter and the end of the City's fiscal year, you have to think some executive at the Bank of Oklahoma would have been in legal jeopardy without this settlement.

Dave Schuttler provides a refresher course on Great Plains with video from the last push to settle this in 2005. In one video, Medlock said instead of preemptively bailing things out, we should let it go to court and have people testify under oath. He mentions handwritten notes from then City Attorney Martha Rupp Carter about the lien on the "collateral" -- Air Force Plant No. 3 -- when the VP of BOk asked for the original paperwork, she wrote that all she had was a forgery.

In another video on that same entry, Jim Mautino mentions being called to the office of Stan Lybarger, president of BOk. Mautino took city attorneys Larry Simmons and Drew Rees with him to the meeting. Lybarger told them that he had twice turned down the Great Plains loan, but relented because then Mayor Susan Savage gave him "assurances." This would be the same Savage who gave "assurances" to the City Council at the time that transfering AFP3 to the Tulsa Industrial Authority would not expose the City to any liability in the Great Plains financing deal.

(Related to that, following Thursday's pre-meeting, Councilor Bill Christiansen -- who, as an airport tenant, recused himself -- pointed out to me that we don't know to what degree BOk may be culpable in this loan default.)

In another video from 2005, Medlock talks about then-Mayor Bill LaFortune relenting from his push to pay off BOk. He also talked about the odd legal arrangements in the TIA-TAIT lawsuit.

And here is video from last night, featuring north Tulsa businesswoman Sharla Walker, who speaks about the immorality of give BOk $7.1 million when north Tulsa needs police, pools, groceries; Jack Henderson explaining why he could not with clear conscience vote for this giveaway. Henderson said he was sick and tired of people being afraid to go to court.

Schuttler writes:

There was plenty of upset citizens attending the council meeting and plenty of other worthy statements and I'll get more out into the internet with time. I think the best way for everyone to voice the opinions now is to cancel your Bank of Oklahoma account. Don't worry they can afford it and it won't hurt them much and you might not get that dirty look the next time you pull out your BOK card. Mayor Taylor will hopefully disappear soon now that this deal is done. Then again she might have more deals ahead but Mr. Baker leaving this week might be a sign of something but then again who knows until the day before.

I hope Mr Turner was correct about the OIG [FAA Office of Inspector General] coming back with tonights deal. Especially since the city still owes 70 plus homeowners their easements after the FAA decision about the money spent by Cinnabar, after the airport officials told them to stop working on those houses when funding ran out. Time will tell and much more money will be spent.

Schuttler also announced a Mayor Taylor sign contest. Steve Roemerman has Taylor holding a $7 million check made out to BOk. That's XonOFF's entry up above.

Finally, here's an analysis of the situation by
Friendly Bear on TulsaNow's public forum:

The promoters of Great Plains Airlines, who have all left town by now, had pitched their "Direct Flights to the Coasts" deal to 2nd tier cities like Wichita and Tulsa.

All the other cities had the sense to turn them down.

Then, the promoters used a network of gifted grifters to garner $30 million in State Tax Credits courtesy of their lobbyist Martha Erling Frette.

Then, got TAIT to pledge 22 acres of land right in the heart of the airport to the bank.

Then, in exchange for $600K in free advertising, they made World Publishing Co. the largest equity owner of GPA, despite today's Tulsa World's repeated Half-Truth that World Publishing only owned 3% of the shares.

PREFERRED shares are not counted the same way as the common stock.

Repeat: The World Publishing company was the single largest equity owner of the airlines. And, that ownership interest bought GPA many, many favorable "news" articles right up to the point when the airline crashed.

WHY didn't anyone exercise some adult leadership over the promoters when the first planes they acquired, they leased two airplanes that were incapable of flying non-stop to either coast.

THAT was a serious RED FLAG.

In a Banana Republic like Tulsa, a few immensely rich families like the Lortons, the Helmerichs, the Kaisers, the Warrens, the Siegfrieds, the Flints, the Rooneys, and the Schusterman's have an influence far, far in excess of what is healthy for what we mistakenly persist in calling our "democracy".

It isn't really a democracy.

It is a Banana Republic.

It only has the edifices of a democracy:

Elections.

Courts.

Judges.

These ruling Oligarch families select our political leaders, the Mayor and a majority of our city councilors.

Their paid paladins like Cameron and Reynolds populate our city boards, commisions and authorities (like TAIT, TMUA, TARE, TIA, TDA, etc.), doing their bidding, and breaking our backs with bad, bad deals like the Trash-to- Energy Plant, clean water piped at cost to subsidize development of our suburbs, Great Plains Airlines, an arena sole-sourced to the Flint-Rooney Oligarchia Familias, etc., etc., etc.

Very scarily, they also select our District and Federal Court judges.

Newly appointed Federal judge Gregory Frizzell is Senator Inhofe's "dear" friend.

Really scary if you are foolish enough or unlucky enough to have a legal tangle with the local Oligarchia Familias.

Their wholly-owned District Judge Jane Wiseman, took all of FIVE minutes to rule that a log-rolled 2003 Vision 2025 ballot, that figuratively sugar-coated voter rat poison, was actually not a log-rolled ballot.

Don't believe your eyes. Believe the judge.

Dear Judge Wiseman's reward:

Shortly thereafter, rewarded with a state Appellant Judgeship.

Welcome to the Banana Republic of Tulsa.

I hope Tulsans will show up at tonight's City Council meetings (at 5 in room 201 of the City Hall tower and 6 in the Council chamber) to voice their objections to Mayor Kathy Taylor's capitulation in the Great Plains Airlines lawsuit and to urge councilors to reject payment of the $7.1 million settlement to Bank of Oklahoma.

You know how think-tanks and political action committees put out report cards? They base their "grades" of legislators on certain key votes, which are usually announced in advance.

I'm announcing today that tonight's vote on authorizing payment of $7.1 million from the sinking fund is a report-card vote. I consider this vote a test of a councilor's integrity and political courage. I will weigh this vote heavily when considering whether to endorse that councilor's ambitions for re-election or higher office. I won't say a "yes" vote is an automatic disqualification, but a councilor who votes "yes" will have to redeem himself in some spectacular and sacrificial way in the future to earn my support. I prefer to support only those candidates who have demonstrated backbone and a willingness to do the right thing in the face of pressure from the wealthy and powerful.

It was illegal three years ago for the City to intervene and pay off the debt which is not owed by the city, but by a bankrupt airline and secured by a trust; the City was not a part of the lawsuit. Adding the City to the lawsuit on a bogus equitable claim of "unjust enrichment," a claim easily defeated because the City of Tulsa was not enriched, unjustly or otherwise, doesn't make paying that $7.1 million any more legal. It only adds conspiracy to misappropriation of funds.

The City of Tulsa doesn't owe this money to BOk, and paying it is against the law. The Mayor and the City Attorney and any councilor that votes in favor of tonight's resolution will be personally exposed to a qui tam action filed by taxpayers under 62 O.S. §372 and §373.

The law provides for a triple penalty. For authorizing the unlawful transfer of $7.1 million, Mayor Taylor would have to pay $21.3 million. She might have to sell her house and park her Bentley at a trailer park for a place to live. Or perhaps she can camp out in her Learjet.

If you're having trouble understanding why this payment is immoral and illegal, follow me in this thought experiment.

Imagine I'm having coffee with Mayor Taylor one day, and she remarks, "You seem sad, Michael. What's wrong?"

"I lent someone $7,000 to help start a new business. The business went broke. I sued the guy, but he doesn't have any money. Another guy cosigned the loan and pledged some collateral, but it turns out he doesn't really own the property, so he can't cover the loan either. I should have known the collateral wasn't his, but I didn't think about it before I lent him the money. Anyway, looks like I'm out seven grand."

"I think I can help you, Michael. Just add the City as a defendant to your lawsuit."

"But the City isn't involved...."

"Doesn't matter. You're my friend, and I can help you. Just file an amended petition against the city, cite any old grounds -- make something up. I'll direct the City Attorney to settle out of court for the full amount. The Council will have to approve taking the money out of the sinking fund, but they're pushovers. They don't like to give the newspaper an excuse to call them bickering obstructionists."

"Won't that raise our property taxes?"

"You know, Michael, it's just pennies per taxpayer, and you're such a valuable asset to our community, you deserve it."

Do you believe that would happen for someone like me? Would it be just? Would it be legal? Of course not. But that's exactly what Kathy Taylor is doing for the Bank of Oklahoma, but for $7,100,000 instead of $7,000.

Tulsa Mayor Kathy Taylor appears to be colluding in a lawsuit against the financial interests of the citizens of Tulsa. She is probably doing this to cover the posterior of the BOk executives responsible for making this bad loan. (As bond trustees for TAIT, BOk was well aware -- or should have been -- of the covenants and restrictions on TAIT's assets and income.)

Tulsa taxpayers have already suffered financially from Great Plains. The transferable tax credits used to finance the airline were repaid to the state treasury through our gasoline taxes, meaning less money to fix our roads and bridges. BOk purchased $18 million worth of those tax credits from Great Plains for $15 million. $3 million in free money -- sweet.

Most councilors will find it very hard to vote no. That's why I consider this vote a measure of integrity and political courage.

David Patrick, Bill Martinson, Dennis Troyer, Bill Christiansen, and G. T. Bynum all received contributions from BOk officers this cycle. Those who were on the ballot in 2006 (all but Bynum) also received BOk backing then. Jack Henderson received $1,000 support from George Kaiser and BOk Financial Corp. PAC during the 2006 cycle, but BOk VP Dan Ellinor backed Henderson's opponent Emanuel Lewis this time around. Only Rick Westcott, John Eagleton, and Eric Gomez do not appear to have received any BOk-related contributions, and in fact, Kaiser and BOKF PAC backed Eagleton's and Westcott's opponents in 2006, and Kaiser contributed to Gomez's opponent this year.

UPDATE: Mayor Taylor was present at the beginning of the meeting, but scrammed before this item came up. The resolution passed by a 5-2 vote. Eagleton, Westcott, Martinson, Patrick, and Gomez voted yes. Henderson and Troyer voted no. Christiansen, as an airport tenant, recused himself. Bynum recused himself, I presume because his grandfather, Robert J. LaFortune, is on the board of BOk. (A grandfather is within two degrees of consanguinity, the standard for the City of Tulsa ethics ordinance.) The "emergency clause," which would cause the payment to be authorized immediately rather than in 30 days, received a 5-2 vote as well, but needed 6 votes to pass.

Eagleton and Westcott objected to the settlement that the Mayor had reached, but they had been advised by the City Council's attorney, Drew Rees, that authorizing payment of the settlement from the sinking fund was a "ministerial" duty, and they had no discretion in the matter. Voting no could subject them to personal liability. (This two-page document from Pennsylvania has a good, brief explanation of ministerial act.)

Rees told me after the pre-meeting that the councilors were not putting themselves at risk of a qui tam action by voting for this, because they had no discretion. Only the official who had the discretion to agree to a settlement involving an unlawful disbursement of funds would be subject to qui tam.

I still would have voted no, despite the risk, and would have asked my fellow councilors for a resolution to seek an injunction against the Mayor's settlement. I don't know if it is possible to enjoin payment of the settlement at this point, but the Council ought at least to express their disapproval formally, perhaps with a censure resolution.

See below for updates, including audio from my interview on KFAQ today and the request for action and the resolution that the City Council will consider tomorrow night.

You may have thought the Great Plains Airlines fiasco was far behind us. Three years ago, then-Mayor Bill LaFortune tried to convince the City Council to pay the Bank of Oklahoma the $7 million (plus) owed by the Tulsa Airport Improvements Trust as a result of their complicated (and illegal) financing deal for the bankrupt airline. LaFortune backed down because of a City Attorney's opinion that the City was not liable for the money and paying a settlement would expose the City's elected officials to a qui tam suit from taxpayers, making them personally liable for misappropriation of funds and subject to removal from office. (My Urban Tulsa Column from November 17, 2005, goes into all the gory details.)

But BOk is coming after your tax dollars once again. Today in District Court, the Tulsa Industrial Authority filed an amended petition in its lawsuit CJ-2004-6124, adding the City of Tulsa as a defendant on the grounds of "unjust enrichment." This equitable claim, I am told, creates an excuse for Mayor Kathy Taylor to say that the City is at legal risk for this debt and therefore the City could legitimately pay it. Rather than vigorously defend against this claim and see if it will hold up in court, Taylor wants to short-circuit the legal process, wave the white flag, and hand over the money. Our money, to be specific.

In 2005, the request to the City Council to repay the debt was preceded by a PR campaign, including an op-ed by John Brock in the Tulsa World. This time, they're trying to sneak it through. Here's what's on the agenda for tomorrow, at the Thursday, June 26, 5 p.m., pre-meeting of the Tulsa City Council:

1. Resolution authorizing payment in full of a judgment settlement, from surplus monies in the Sinking Fund for Case No. CJ-2004-6124: Tulsa Industrial Authority (TIA) vs. Tulsa Airports Improvement Trust (TAIT), City of Tulsa, et al. (Emergency Clause) 05-916-10

And on the 6 p.m. regular meeting agenda:

3. b. [Mayor's Items] Resolution authorizing payment in full of a judgment settlement, from surplus monies in the Sinking Fund for Case No. CJ-2004-6124: Tulsa Industrial Authority (TIA) vs. Tulsa Airports Improvement Trust (TAIT), City of Tulsa, et al. (Emergency Clause) 05-916-10

There had to have been a lot of coordination between the Mayor, the TIA, and the BOk to make all this happen so quickly. The resolution authorizing payment couldn't go forward until the City was added as a defendant to the lawsuit. Isn't it nice to know our Mayor is assiduously looking for ways to give our tax dollars away to private interests?

"Surplus monies in the Sinking Fund" doesn't mean we have extra cash laying around. It means your property taxes will go up to pay for this, as is the case for all judgments against the City.

Reading the definition of unjust enrichment, it's hard to see how the City could be found liable:

1. Was the defendant enriched?
2. Was the enrichment at the expense of the claimant?
3. Was the enrichment unjust?
4. Does the defendant have a defense?
5. What remedies are available to the claimant?

The City wasn't enriched. That should end the matter right there.

In a nutshell, here's what is happening: BOk made a bad loan to finance Great Plains Airlines. GPA went bankrupt, but BOk still wants to recover its money. On August 7, 2006, BOk sued PriceWaterhouseCoopers, for professional negligence. The case was settled out of court within the month.

TAIT doesn't have to resources to pay back BOk, nor does TIA, so BOk is hunting around for someone with deep pockets to hold liable. That would be the City of Tulsa.

Why won't BOk just write this off as a bad lending decision on their part? It may be because the corporation and its officers would be liable under FIRREA, federal lending regulations put in place following the collapse of the Savings and Loan industry. S&Ls used federally-insured funds to make bad loans to insiders. When the borrowers defaulted and the S&Ls folded, the taxpayer was left holding the bag.

Even though it appears that BOk officials ignored plenty of warning signs, they approved the loan and did not call it when GPA's financial problems surfaced. Nevertheless, they want the taxpayer to wind up holding the bag.

One more thing: Shouldn't the public have time to examine this deal before the Council approves it? And shouldn't we know how much of the loan BOk has recovered through the bankruptcy court, the PriceWaterhouseCoopers lawsuit, or other means?

MORE: I've found some web references to laches as a defense against claims in equity, a category that includes a claim of unjust enrichment. Wouldn't waiting four years after filing the initial lawsuit constitute laches?

More on equitable remedies from Wikipedia:

Equitable principles can also limit the granting of equitable remedies. This includes "he who comes to equity must come with clean hands" (ie the court will not assist a claimant who is himself in the wrong or acting for improper motives), laches (equitable remedies will not be granted if the claimant has delayed unduly in seeking them), "equity will not assist a volunteer" (meaning that a person cannot litigate against a settlor without providing the appropriate consideration e.g Money) and that equitable remedies will not normally be granted where damages would be an adequate remedy.

AUDIO: I was on KFAQ's Chris Medlock Show this afternoon, along with Medlock's fellow former councilors Roscoe Turner and Jim Mautino. All three were on the City Council in 2005 the last time a mayor tried to pay off BOk. Here's Hour 1 and here's Hour 2.

DOCUMENTS:

Here is the backup material for the item on the Council's agenda. First, the Request for Action from interim City Attorney Dierdre Dexter to pay $7.1 million from the sinking fund :

REQUEST FOR ACTION: RESOLUTION

DEPARTMENT: LEGAL
CONTACT NAME: Deirdre O. Dexter (ga)
ADDRESS: City Hall, Room 316
TELE: 596-7717

[...]

SUMMARY:

Re: Tulsa Industrial Authority v. Tulsa Airports Improvement Trust, City of Tulsa, et al. CJ-2004-6124

The Tulsa Airports Improvement Trust and City have agreed to settle the above case. In the lawsuit, Plaintiff TIA, by and through Bank of Oklahoma as attorney-in-fact, alleged that TAIT breached an obligation to purchase property from TIA and alleged a claim of unjust enrichment against the City of Tulsa. Plaintiff's Second Amended Petition seeks, as of March 31, 2008, the amount of $11,648,294.00 plus additional accrued and accruing interest and costs. It is anticipated that the parties' settlement will be approved and a Journal Entry of Judgment will be filed on Thursday, June 26, 2008. At that time, a copy of the Judgment will be provided. Attached for Council and Mayoral approval is a resolution authorizing payment from the sinking fund. If the Judgment is not entered, no action will be requested.

BUDGET: FINANCE DIRECTOR APPROVAL:

FUNDING SOURCE: $7,100,000.00 Sinking Fund

It is the recommendation of the Legal Department that the Finance Department be directed to make a wire transfer
from funds available in the Sinking Fund in payment of this judgment.

REQUEST FOR ACTION: All department items requiring Council approval must be submitted through Mayor's Office.

Council review and approve the Resolution authorizing payment from the sinking fund. Mayor approve and direct that Finance to make a wire transfer in the amount of $7,100,000.00 to the Bank of Oklahoma, attorney-in-fact for Tulsa Industrial Authority.

Dexter was previously employed by Frederic Dorwart Lawyers. The firm is the legal counsel for Bank of Oklahoma Financial Corporation. Dorwart is also the attorney of record for the Tulsa Industrial Authority for this lawsuit.

And here is the

I hear these stories all the time -- stories about minor disasters and expensive mistakes at the City of Tulsa Public Works Department. The stories don't reflect badly on the citeewurkors but on the managers and policy makers further up the hierarchy.

I haven't had time to chase any of these stories down, but I hear them over and over again. At the very least, they are widely believed, and if they are local urban legends, it's probably in the TPWD's interest to provide documentation to debunk them.

The story I heard tonight involved a manhole cover on N. Sheridan near King St. Heavy rains were causing a sanitary sewer backup, actually lifting the cover up and allowing raw sewage to run out. The brilliant solution to this problem was to weld the cover to the manhole. So instead of the overflow pressure lifting the cover above the street, the pressure broke the street.

I have heard about the collapse of a city water storage tank on the hill west of the Port of Catoosa. I have heard about a pump station failing catastrophically because it was pushed beyond its rating to get water up the hill to the storage facility on Turkey Mountain.

I have heard of streets sinking several inches due to subsurface voids; the problem is "corrected" by topping up the resulting sinkhole with paving material.

I've heard about lousy water pressure from many people in the area around the Fairgrounds. The topological divide separating the Arkansas River drainage basin from the Verdigris River basin runs roughly northwest to southeast through the Fairgrounds, making it a logical site for a water tower. The city used to have a big water tower at 21st and Louisville. What tower is serving the higher elevations of midtown these days? Could that explain the lousy water pressure?

I keep hearing rumors that, despite a consent decree to fix our sanitary sewage system in the 1980s, we still have overflows and backups that can contaminate homes, parks, and streams. The people who tell me this think maybe we need the EPA to come back to Tulsa and check into the health of our sewer system.

The common theme seems to be planning and engineering failures. As I said, I haven't confirmed any of these stories, but they're out there, and they raise doubts about trusting the TPWD with a couple billion dollars. This is why we need a top-to-bottom audit of the department, with whistleblower protection, whether Director Charles Hardt wants it or not.

Blogger Steve Roemerman receives regular updates on the city's finances and the state of the local economy in his role as a member of the City of Tulsa Sales Tax Oversight Committee. Today he has posted Tulsa's sales tax stats and economic indicators for the most June 2008, showing sales tax revenues up 3.8% over the previous year. Good news, but the Consumer Price Index has gone up 4% over the last year. Visit Steve's blog for more info.

UPDATE: 5:28 PM: Brian Barber's comments (a second one explained that copy editors write the headlines, not the reporters) have vanished from the website.

The headline read "Public works audit angers councilors".

The headline doesn't seem to fit Brian Barber's story, and in fact, Barber objected to it by posting a comment on the web version of the article:

Tulsa World Staff Writer Brian Barber, (6/5/2008 8:27:36 AM)

I disagree with the headline that was placed above my story. While comments at the meeting were direct, no one was angry.

Good for Brian. Writers need to speak up when headlines distort the reader's perception of the story. Given the Whirled editorial board's disdain for the City Council, it's easy to suspect a deliberate decision to use the headline to cast the Council in a bad light, when it's Public Works director Charles Hardt who comes across in the story as defensive and shifty.

Barber wrote a solid story that explained to the reader not only what was said, but the dynamics of the discussion between the councilors and Hardt.

Hardt had told the Council that the long-awaited audit of his department would be a self-audit.

The self audit will start in July and last about a year, with the organization's representatives on site to oversee the process.

The areas to be examined include service delivery, effectiveness and accountability, management and administration, teamwork, staff pride, interdepartmental coordination and planning for the future.

Several councilors are quoted in the story expressing concern about Hardt's announcement:

"I disagree with us calling this an audit," Councilor G.T. Bynum said during this week's committee meetings. "In my opinion, an audit necessitates some form of independence.

"I think what's planned will have great benefit, but I do think we need an independent audit of the Public Works Department."

Councilor Jack Henderson said that over the years he's been in office, many people have called for a public works audit.

"But I know this isn't what they had in mind," he said.

There are stories out there about a collapsed and unusable water reservoir tank, about pump stations destroyed because of overpressure required by a poorly planned system, about favoritism toward certain developers in the planning of water and sewer projects, about collusion among local contractors resulting in higher prices. I've been told that Public Works has ways of "hiding" money -- not for personal enrichment, necessarily, but to be able to shunt funds between projects without getting the politicians involved.

Many people have been calling for a full and independent financial audit and a full and independent performance audit of the Public Works department, chief among them former Councilor Jim Mautino. An internal self-audit will not provide the degree of scrutiny needed to find and correct problems and build public confidence in the department.

Hardt's reaction to the councilors' concerns:

Hardt grew somewhat defensive with the talk of an independent audit.

"If you want an audit that looks at the books and financial transactions, that's not what this is," he said.

"This is more of a performance audit that looks at how we deliver service, whether we're effective and whether there are ways we can improve.

"But if you really want to know whether we did something wrong, I think you need to hire a head hunter or a witch hunter and get on with it."

Bynum said he doesn't think an independent audit should be viewed as something to expose "any perceived wrongdoings."

"I simply think there would be some value in it," he said.

Hardt said he's been through such audits before that were wastes of time.

"I've found that you have auditors who have no knowledge or understanding of what the engineering world does and no clue as to what our objectives are," he said.

"This is a far more meaningful process than having an audit firm that doesn't understand one thing about constructing something but tells us how we should have done it. That's awfully irritating."

A member of the city Auditor's Office stepped forward during the meeting and suggested that the process should be called a quality assurance review, rather than an audit.

Exactly right. A quality assurance review measures performance against the department's own rules, procedures, and goals, but it doesn't examine whether the rules, procedures, and goals are appropriate or effective.

A real audit process needs to create a secure environment for employees to speak out about problems they've observed. A citeewurkor needs to be able to say, "We've always done it that way, but { it's always seemed fishy, it never made sense, it seems wrong } to me," without fear of retribution. PW is a big department, and it would be easy for someone to shape rules and procedures in a self-serving way without being obvious about it. (Self-serving doesn't necessarily mean lining one's own pockets. It could also involve power or personal comfort.)

Over the transom late last week, I received a copy of a scathing letter, dated May 23, written by Tulsa City Councilor Bill Martinson to Stan Lybarger and Mike Neal, Chairman and CEO, respectively, of the Tulsa Metro Chamber. Martinson, who has headed up the Council's effort to develop a financial package for fixing our streets, was responding to a May 22 letter from Lybarger and Neal to the City Council, urging them not to set a streets funding election for July 29, the date of the Oklahoma primary election.

In the extended entry, you'll find the text of the Chamber's letter (the part I have at least -- from Martinson's reply, there seems to be at least one page missing from the copy of the Chamber's letter I received), followed by Martinson's reply.

A few highlights from Martinson's letter:

Setting aside the condescending tone of your letter for a moment, it conveyed a serious lack of understanding as to the development and status of the Council's proposal to fix Tulsa's streets....

Your contempt for Tulsa's City Council was apparent in your comments. To assume that the Council and City staff would advance an initiative of this magnitude to the voters and ignore fundamental due diligence and statutory requirements is arrogant and absurd. Several of your other bullet points revealed an appalling level of ignorance....

I must admit that I found your comment about ROI on campaigns rather amusing considering your recent track record. Your temerity to condescend to the Council on voter behavior, when by definition, each City Councilor has a better record with the voters than the Chamber, again demonstrates an incredible level of arrogance. We have scheduled public meetings and will have programs on TGOV and information available on our web site to share the results of our research and present our plan. The process has been, and will remain, transparent. I have great faith in the voters, if they are given the facts and have an opportunity to make an informed decision. You may consider it a novel approach, but I would rather tell the citizens the truth and let them decide rather than attempting to manipulate the outcome.

Congratulations on your success in Oklahoma City to secure $25 million in funding for low water dams on the river. I believe we all support river development and welcome the day when you feel the same passion to convince the Tulsa delegation to support our transportation system....

The Chamber appears fixated on glamour and glitz to enhance economic development....

I had hoped that this initiative to fix our streets would be an opportunity to heal the community. I believe the Council, administration, and citizens are prepared to face the issue and am disappointed that the Chamber feels threatened with that initiative....

It's my understanding that there has been some conciliation between Martinson and the Chamber. Hopefully, the Chamber understands that a well-designed package focused on infrastructure rather than a glitzy, expensive campaign, is what will win over the voters, regardless of when the package is on the ballot.

I admire Martinson for standing up to the Chamber's arrogant attitude. That's the kind of leadership that the Gang of Five demonstrated and that we still need from the City Council.

(UPDATE: I received the missing bits of the Chamber letter and have incorporated them below.)